Which of the Following Is NOT a Cash Flow from Operating

question 39

Multiple Choice

Which of the following is NOT a cash flow from operating activities?

• A) Cash payments on the principal of long-term debt
• B) Payments for utilities and rent
• C) Payments to purchase raw materials
• D) Cash receipts from selling goods and services

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Definitions:

Merchandise Creditors

Suppliers or vendors to whom a company owes money for inventory purchased on credit.

Current Liability

A current liability is a company's short-term financial obligation that is due within one year or within the normal operating cycle.

Current Asset

Assets expected to be converted into cash, sold, or consumed within one year or the normal operating cycle of a business, whichever is longer.

Direct Method

A way of preparing the cash flow statement where actual cash flow information from the company's operations is used, as opposed to the indirect method which adjusts net income for accruals.